Weekly Report - Sep 14th to Sep 18th '09

ES is now showing early signs of exhaustion, but the market remains bullish nonetheless (cf. snapshot posted on the ATT blog). We know that we've been hovering in a resistance area for a while, and while there is still some potential for a higher target, a retracement will be necessary as underlying energy is weakening. Such profit taking could take place this week.

TF is obviously very much correlated, but is already weaker on pivot level (~592). It could retrace to the high 570s.

EURUSD was also inches away from our target (1.462) and strong resistance level around 1.464. Retracement to the 1.45 area is engaged but support could be found on a Fib level the short term. The weekly chart remains mildly bullish.

( posted 7:10 AM UK )

Market Update - Sep 11th '09

As mentioned in previous reports, the bullish bias is still there for now. Only longer time frames seem to indicate possible exhaustion in a few weeks. A retracement will be then necessary but we have ample time to review our scenario. In the short term we keep a target for ES in the mid to high 1040s.

TF needs to hit its resistance on 592 but could certainly go higher later on. Triple witching coming next week, so the market could pause first.

EURUSD: on its way to 1.464. Short term bullishness but some limited retracement is in the cards (1st Fib level), so we'll watch for a possible stall as well (weekly chart).

( posted 7:40 AM UK )

Market Update - Sep 10th '09

Scenarios always have to be refined as we go along, this is why i often propose to adjust positions.

Today, we see ES back to the top of its trading range around 1032 with a little more energy lately. If current highs are broken, the probability of it going higher still is strong particularly on intraday tick charts. Having said that, we have another set of resistance just below 1050 (half a price segment, Fib etc) and underlying force coming from longer term indicators remains weak. In other words, we have to remain careful of the market stalling at some point.

TF is also aiming to ~593 with the same possibility of stall.
Again we do have a reassuring longer term upward bias, but a retracement is possible along the way, hence we'll keep watching this market...

EURUSD: on stall level on 1.458 and probably aiming to its strong resistance level around 1.462 to 1.464. As mentioned in previous report, we have noticed a (spurrious) correlation with indices, and while the upward bias is certainly there, EURUSD is definetly entering overbought zone where a retracement would be healthy.

( posted 7:20 AM UK )

Market Update - Sep 9th '09

ES hovered around the mid 1020s as anticipated yesterday. Again the residual upward bias is there, but lower time frames point toward some retracement later on. The air hole effect can carry on for over a day. If retracement starts, we'll have a 1009 target. No change of scenario on longer time frames.

TF is also losing steam close to the 578 target (60min chart). There is no sign of retracement here though. Both indices may have to fight their respective resistance levels first to retrace (1032 for ES). However both are sitting on their stall level just below targets with little energy left.

EURUSD: still bullish. If you read earlier reports, you may have noticed a target close to Dec 08 highs (1.462 to be exact) if 1.44 was broken. EURUSD is overbought but could give it a go again within a week. It has however hit stall level already which is often good enough to take profits or tighten stops at least.

( posted 6:25 AM UK )

Market Update - Sep 8th '09

ES stalled in the low 1020s as expected but contains enough momentum to stop attempts to retrace. It should therefore keep hovering in the same price range. In the most optimistic scenario, it may try and reach range highs, but looks relatively unclear still at this time (~3AM Eastern).

TF could go a little higher (~575), where it could pause.
Both indices look fairly bullish but lack energy.


We note that EURUSD has reached a strong resistance around 1.44 where it should also pause. Like our indices (remarkably correlated lately), EURUSD has some residual upward momentum.

( posted 8:25 AM UK )

Weekly Report - Sep 7th to Sep 11th '09

ES proved to be a bit more bullish than anticipated on Friday. The first resistance indeed broke easily to see prices settle just below 1020.
At this point, it isn't clear how far ES can go now. There is some indication of stalling in the low to mid 1020s. However, this last test of 1000 bodes well for a higher target even if energy is lacking to support the current buying spree. We may therefore see a continuation of the same trading range on the daily chart with a slight upper bias in the long run.

TF is also looking bullish right now. We'll watch resistance around 570 and 575 as the underlying trend (like ES) is pretty weak still.

EURUSD: Current resistance in on current highs around 1.434. It should eventually go higher, but is definitely lacking stamina (like indices...)


( Posted 9 AM UK )

Market Update - Sep 4th '09

Support was found yesterday in the low 990s but 1000 is certainly still acting as a mild resistance. This is definitely more a time of hesitation that a real tug-of-war on a salient level.

ES could reach 1008 but is lacking both direction and energy, and this long weekend will probably not help as volumes should remain light until next week.

TF is also hesitant, and while it could reach 566 (Fib), signs of erosion to 544 are still there.

I understand this market update may be a little confusing for some, but short positions should see their stops tightened a bit above Fib levels for now until we get more clarity. Intraday positions should be monitored more agressively, or simply closed until next week when volume picks up again.

( posted 7 AM UK )

Market Update - Sep 3rd '09

Selling pressure hasn't abated yet, so we should see a continuation of the current erosion under the 1000 level. Support should however be found shortly, either on current levels or after dropping to the [968-980] range.
Short intraday time frames seem to indicate 1000 as a mild resistance now on the 60mins chart.

TF can likewise find support on current lows or could also shed another 10 points. Therefore, even though the longer weekly outlook is still fairly bullish, support could be first found on the daily Fib 38% level. We'll review this on the weekly report.

Note on EURUSD: the bounce on 1.418 has stalled for now on pivot level hence some hesitation on current levels (~1.428). Although pivot may act as a resistance for now (60mins chart), it will probably be broken later on (higher time frames).


( posted 6:30 AM UK )

Market Update - Sep 2nd '09

Didn't i see it coming... ? We had that typical "air hole" configuration which translated in a sudden fall which i thought would be limited to 16 points.
Es instead shed the full size of the current trading range.
It is not an error of the model per se, but simply the same difficulty to gauge to which extent volatility will compress time. ES had to come back to 1000. It could have been anytime this week.

Now the trouble is that indicators have obviously been fairly bearish all day on the 60mins chart, only mitigated slightly by very very light trading after hours. ES should therefore remain low until all bearish pressure is dissipated. The 1000 level will probably hold (intraday levels show a support [996-1000] range) although it has now been traversed several times hence has lost some of its strength, and we cannot discard the equiprobable chance of a breakout ( for another 32 points ??).

1000 is obvously a key level, and the bottomline is that there is still some bearishness to evacuate either through a price drop or passage of time.

We have to note however that again TF is considerably more bearish than ES and could settle below 550 if ES doesn't hold its current 1000 support level.

Longer term outlook remains unchanged. This is at this point only normal profit taking after the "irrational exuberance" since March.

( posted 7 AM UK )

Market Update - Sep 1st '09

The good thing is in times of turbulences is to be able to count on at least a few invariants. One is the 32 point price segment (itself subdivided in sub segments of 8 and 16 points) we've seen on ES for a very long time.
So, even abrupt "air holes" convert into price moves we could call quantum leaps.
ES shed about 16 points in a couple of days to find support around 1016 and is now bouncing up to 1024. What a coincidence...
We can also draw a parallel approach using Fibonacci.

Now the short term hesitation is still there and passing 1024 may be a little difficult but the true test is around 1029 to 1032.
As mentioned in previous reports, one cannot discard the necessity to retrace lower to 1000 to gather strength. Over the longer term, even if ES is now lacking stamina (Entropy is fading), the outlook is still modestly bullish.

We note that TF is also bullish over the longer term but is more bearish in the short term. Therefore the overnight bounce on ES may be short-lived. Salient levels will be checked carefully.

( posted 7 AM UK )

Weekly Report - Aug 31st to Sep 4th '09

As mentioned several times last week, 1032 seems to be a tough one to pass, with fallbacks on 1024 or lower around 1016 (again major energy levels are more or less 8 points apart on ES).
Difficult to give an accurate scenario as a retracement is quite possible if only to gather strength to go higher later on still. The weekly chart shows energy exhaustion like lower time frames, but seems nonetheless set on a course to a higher Fib level.
Volumes should pick up by 10% in the next couple of weeks, thus helping to resolve the current uncertainty.


TF: We note that while the long term scenario is the same, indications of a forthcoming retracement are more visible. TF could shed up to 16 points to 562. should erosion persist, we'll check the 568-570 area first.

EURUSD: in bounce territory at this level (1.428), but could well drop to 1.422. Longer term upside potential is definitely there still even though energy is slowly dissipating at the moment. Support at 1.422 may do the trick and allow EURUSD to rise again.

( posted Sat 11 AM UK )

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Market Update - Aug 28th '09

Well, there was no post earlier this morning, but it doesn't seem like i missed much action so far... ES is still stuck in the [ 1024 - 1032 ] price segment (you will notice it is about 1/4 of the overall range).
Again, buyers might just give up... so we'll watch for a possible breakout.

More details in the weekly report

( posted lated 6 PM UK )